Drawdown recovery and losing-streak calculator

To recover a drawdown d, the balance needs a gain of d ÷ (1 − d): a 20% drawdown needs a 25% gain, and a 50% drawdown needs 100%. The gain is always bigger than the loss, because it has to come from a smaller balance.

This drawdown calculator also counts how many losses in a row take an account to a daily or maximum loss limit, and gives the exact odds of a losing streak for a loss rate you assume. It measures losses only: no projected balance, no recovery time.

How it works

The calculator has three tabs:

• Recovery. Enter a drawdown: how far the balance is below its high point, in %. You get the gain needed to recover it, and a table from 10% to 90%.
• Streak to limit. Enter your risk per trade, how each loss is sized, and a max drawdown and daily loss limit. You get the drawdown after a run of losses, the losses that reach each limit, and how many full stop-outs fit in one day.
• Streak odds. Enter a loss rate (your own assumption, not a forecast) and a number of trades. You get the chance of at least one run of 4 to 12 losses in a row, and the expected longest losing run.

Losses can be sized two ways. As a share of the current balance, each loss is a little smaller than the one before. As a fixed amount, a share of the starting balance, every loss is the same size, which suits a limit that counts from the starting balance. The inputs stay in the page address, so a scenario can be shared.

Drawdown and losing-streak formulas

With d the drawdown, r the risk per trade, n a number of losses in a row and D a loss limit, all as fractions, drawdown(n) is the drawdown after n losses and losses(D) the number of losses in a row that reaches D. Here ceil rounds up to a whole loss.

gain(d) = d ÷ (1 − d)

share of the current balance:
drawdown(n) = 1 − (1 − r)^n
losses(D) = ceil(ln(1 − D) ÷ ln(1 − r))

fixed amount:
drawdown(n) = n × r
losses(D) = ceil(D ÷ r)

The streak odds come from exact dynamic programming, not a simulation. With q the loss rate and k the run length, let a(n) be the chance that n trades hold no run of k losses. Then a(n) = 1 while n is below k, a(k) = 1 − q^k, and after that:

a(n) = a(n − 1)
       − (1 − q) × q^k × a(n − k − 1)

The first run of k ends exactly at trade n when the k trades up to n lose, the trade before them wins, and the trades before that hold no run. The chance of at least one run in N trades is 1 − a(N). The expected longest run adds up the chances of a run of at least 1, 2, 3 losses and so on.

Worked examples

All numbers below are illustrative and come straight from the calculator.

Pitfalls

• Where the drawdown is measured from. Here it counts from the balance before the losses. Some prop-firm limits count from the starting balance, and some trail the highest balance or equity, which leaves less room after a good run. Check your account’s exact rule.
• A limit is not a cap on the loss. A limit checked before each order stops new trades. Trades already open run to their own stops, and gaps or slippage can make a loss larger than the stop. The daily-limit example above shows how far past the limit a day can end.
• The loss rate is an assumption. A short record says little about the next hundred trades. The odds treat every trade as independent with the same loss rate, but real losses often cluster around news or a change in the market, so real streaks can be longer.
• Streaks are about the whole sample. A 54.6% chance of a 6-loss run is the chance that one shows up somewhere in 100 trades, not in the next six.
• Size and limits go together. The same streak is a drawdown at a small risk per trade and can end an account at a large one. The position size calculator turns a risk per trade into a lot size, and the risk-reward calculator shows the win rate a trade needs to break even.

How PipWarden handles this

PipWarden runs as an Expert Advisor in MT5 on a Windows PC or VPS, not on a phone. It sizes every trade from your risk per trade as a share of the account’s equity when the order goes in (the “% of current balance” mode above), using your broker’s tick value and volume step. If that risk is too small for the broker’s minimum lot, the bot skips the trade rather than raising the risk.

Your daily loss limit (5% by default) and position caps are checked before every order. The day’s loss counts from the balance at the start of the UTC day and includes open trades’ floating losses. Once it reaches the limit, no new trades open until the next UTC day. The limit stops new trades, not open ones: trades already open run to their own stops, so a day can end past the limit. The bot has no overall drawdown stop of its own, so a prop firm’s maximum loss is yours to track. You can pause the bot or use the kill switch at any time.

See how it works and the risk controls, and read the risk disclosure before you trade.